Pemex works to replace gas supply lost after blast

9/28/2012

By LAURENCE ILIFF

MEXICO CITY  Mexicos state-owned oil company Petroleos Mexicanos, or Pemex, is working with industry and government power utility Comision Federal de Electricidad, or CFE, to manage limited natural-gas supplies in the wake of a Sept. 18 plant explosion near the northern border city of Reynosa that killed 30 workers, oil company executives said Thursday.

Pemex CEO Juan Jose Suarez Coppel said that in addition to increasing gas imports from the US to the maximum possible level through pipelines, the company is working with the industry group Concamin and the CFE to see if all can agree on how to spread the extra costs that would come from importing more expensive liquefied natural gas, or LNG, through the Pacific port of Manzanillo.

Mr. Suarez said at a news conference he expects it will take about 15 days to complete a bypass that will allow gas to flow once again from the northern Burgos gas fields to the central part of the country.

He said the gas-reception center damaged by blast is a relatively new plant and that the cause of the accident is being investigated by authorities and international experts.

Mr. Suarez said there was no evidence that the explosion was caused deliberately.

Pemex's director of operations, Carlos Murrieta, said that 800 million cubic feet/day of natural of Burgos production were halted by the blast, and that about half that amount has been effectively replaced through a combination of imports and trimming use of the fuel at Pemex and CFE.

Mr. Murrieta said the pressure in Pemexs natural-gas pipeline system currently is above critical levels.

CFE said recently that it is using more fuel oil and diesel fuel because of the gas shortage, which preceded the Pemex accident at Reynosa.

Mr. Suarez said that natural-gas cutbacks will not affect Pemex's output of crude oil. Pemex pumps natural gas into oil fields to increase pressure and output, but the gas is recovered and reinjected, so the practice is not gas consumption so much as gas recycling, he said.

Pemex is a major exporter of crude-oil, but a net importer of natural gas and had been importing more than one billion cubic feet/ day in recent months to try and satisfy increasing demand for the cheap gas from heavy industry.